P K SARKAR says...SAIL made Rs 320 cr irregular payment to Executive Employees: CAG
The Comptroller and Auditor General has hauled up state-owned steelmaker SAIL for not adhering to guidelines on performance-related payment to its employees, which resulted in Rs 319.61 crore irregular outgo from 2007-08 to 2010-11.

The Comptroller and Auditor General has hauled up state-owned steelmaker SAIL for not adhering to guidelines on performance-related payment to its employees, which resulted in Rs 319.61 crore irregular outgo from 2007-08 to 2010-11.

n a report tabled in Parliament today, CAG said SAIL introduced performance related pay (PRP) scheme for its executives, following the guidelines issued by the Department of Public Enterprises (DPE).

It also constituted a remuneration committee headed by an Independent Director to decide the PRP and policy for its distribution within the prescribed limit.

The DPE guidelines required that the company should have robust and transparent performance management system and it should adopt a "Bell Curve Approach" in grading executives. This meant that not more than 10-15 percent were to be graded as outstanding/excellent, and 10 percent of them should have been graded as below par. No PRP was to be paid to those achieving below par rating.

"The company, however, did not adopt "Bell Curve Approach" in grading and paid PRP to all its executives in violation of the DPE guidelines, resulting in avoidable payment of Rs 87.45 crore for the years 2007-08 to 2010-11," CAG said, noting that no PRP was paid for 2011-12.

The top auditor also rejected SAIL management's contention that grading the performance of 10 percent of its executives as "below par" should not be insisted for a "Maharatna company like SAIL and actual distribution of performance grading was almost Bell Curve shaped".

It also said that PRP formula adopted by SAIL's Remuneration Committee exceeded the DPE prescribed limit, which was "irregular". As a result, "an excess payment of PRP was made to the company's executives from 2007-08 onwards totalling Rs 232.16 crore up to the financial year 2010-11".

CAG also noted that DPE, in its reply, said powers delegated to Maharatna CPSEs do not cover the matters relating to pay/PRP. It further said that Ministry of Steel also agreed that SAIL should have adopted Bell Curve Approach and PRP formula adopted by company's Remuneration Committee exceeded DPE prescribed limit, which was irregular.

"Thus, SAIL management did not adhere to the DPE guidelines applicable to it with respect to payment of PRP and made an irregular payment amounting to Rs 319.61 crore for the years 2007-08 to 2010-11," it said.

Citing another case of violation by SAIL, the CAG said it undervalued the monetised value of recurring expenditure on infrastructural facilities attributable to company executives. This resulted in excess payment of perks and allowances of Rs 98.61 crore between 2009-10 and 2011-2012.

This report of CAG is on macro level. If auditing is carried on micro level, greater financial irregularities will surface out. The reasons are as follows:
Executive & Non Executive are divided on the name of trade unions.
The pay revisions for both Executive and Non Executive are held separately which creates a lot of discrepancies.
The information (regarding working, production, projects, pay, prp of executives & non executives, actual duties of executives, executive:non executive ratio, promotion policies, etc) is not transparent, and not visible on internet.
Working culture is very garbled. Even Supervisor Cadre is not clearly distinguished, whether will be done by executives or non executives.
It is reflected that non executives are totally illiterate and hence forced to associate with trade unions, and executives are constitutional administrators from India.

SAIL made Rs 320 cr irregular payment to Executive Employees: CAG
The Comptroller and Auditor General has hauled up state-owned steelmaker SAIL for not adhering to guidelines on performance-related payment to its employees, which resulted in Rs 319.61 crore irregular outgo from 2007-08 to 2010-11.

The Comptroller and Auditor General has hauled up state-owned steelmaker SAIL for not adhering to guidelines on performance-related payment to its employees, which resulted in Rs 319.61 crore irregular outgo from 2007-08 to 2010-11.

n a report tabled in Parliament today, CAG said SAIL introduced performance related pay (PRP) scheme for its executives, following the guidelines issued by the Department of Public Enterprises (DPE).

It also constituted a remuneration committee headed by an Independent Director to decide the PRP and policy for its distribution within the prescribed limit.

The DPE guidelines required that the company should have robust and transparent performance management system and it should adopt a "Bell Curve Approach" in grading executives. This meant that not more than 10-15 percent were to be graded as outstanding/excellent, and 10 percent of them should have been graded as below par. No PRP was to be paid to those achieving below par rating.

"The company, however, did not adopt "Bell Curve Approach" in grading and paid PRP to all its executives in violation of the DPE guidelines, resulting in avoidable payment of Rs 87.45 crore for the years 2007-08 to 2010-11," CAG said, noting that no PRP was paid for 2011-12.

The top auditor also rejected SAIL management's contention that grading the performance of 10 percent of its executives as "below par" should not be insisted for a "Maharatna company like SAIL and actual distribution of performance grading was almost Bell Curve shaped".

It also said that PRP formula adopted by SAIL's Remuneration Committee exceeded the DPE prescribed limit, which was "irregular". As a result, "an excess payment of PRP was made to the company's executives from 2007-08 onwards totalling Rs 232.16 crore up to the financial year 2010-11".

CAG also noted that DPE, in its reply, said powers delegated to Maharatna CPSEs do not cover the matters relating to pay/PRP. It further said that Ministry of Steel also agreed that SAIL should have adopted Bell Curve Approach and PRP formula adopted by company's Remuneration Committee exceeded DPE prescribed limit, which was irregular.

"Thus, SAIL management did not adhere to the DPE guidelines applicable to it with respect to payment of PRP and made an irregular payment amounting to Rs 319.61 crore for the years 2007-08 to 2010-11," it said.

Citing another case of violation by SAIL, the CAG said it undervalued the monetised value of recurring expenditure on infrastructural facilities attributable to company executives. This resulted in excess payment of perks and allowances of Rs 98.61 crore between 2009-10 and 2011-2012.

Confederation of Maharatna Company Officers demands pay revision in public sector enterprises

Officers of India?s leading Maharatna companies have come together to form a confederation, which includes representatives from the Officers Associations of ONGC, SAIL, IOCL, CIL and NTPC. The confederation has approached the government with request for pay revision for officers of CPSEs. The last pay revision had come into effect in January 2007.

Leaders of the Confederation of Maharatna Company Officers? led by Mukul Kumar, Convenor, met the Secretary (Department of Public Enterprises), for advising the concerned CMDs and Boards to initiate the process of pay revision for officers of CPSEs.

The present pay revision was based on the recommendation of second Pay Revision Committee (PRC) constituted by DPE vide resolution dated November 30 2006.The second Pay Revision Committee, under the Chairmanship of Justice (Retd), M J Rao, has opined in the preface of report that ?the responsibility of future revision should be given to the Board of Directors of a company subject to the approval of the concerned ministry in discharge of its role as shareholders.?

In line with the directions of the MJ Rao committee, respective associations have raised the issue of pay revision with the Board of Directors of the companies. However, no action is being taken on the requests of the Officers Association of individual companies.

Historically, the pay structure of officers was revised after every five Years during last three decades, except the last pay revision and the periodicity of pay revision used to be recorded in all DPE OMs. It is also worth mentioning that the periodicity has not been mentioned in the DPE OM dated November 26, 2008 for the pay revision effective from Jan?07, on account of the spirit of the aforesaid quoted opinion of the Justice Rao Committee desiring the boards of the CPSEs to take over the task. These views of the MJ Rao committee have also been upheld and further qualified by a panel of experts on reforms in CPSEs constituted by the planning commission, in their report submitted to government of India.

The officers of PSUs are facing a severe hardship in managing their family needs due to severe erosion in the real compensation in view of spiraling inflation during past six years. The following comparison of cost of living under the heads of food items, housing and education etc in 2007 vis-s-vis 2013 is as under-

lThe house rentals have increased by more than 100 per cent since 2007 on pan India basis. As CPSE employees are not insulated on this front, we have to arrange for our residential accommodation ourselves from our salary.

lCost of education is increasing steadily and has become becoming unaffordable. As an indicator, the fees of IIM Ahmedabad for PGP course has increased from 1.77 lakh during 2007 to 7.4 lakh in 2013. The primary & secondary schools fees have escalated, even in higher proportions.

lFurthermore, the cost of food and grocery items has jumped substantially since 2007 making existing salaries grossly inadequate.

The provisions of increase in DA and annual increment of three per cent have failed to counter the escalation in expenditure for basic needs that is food, housing, education. Since House Rent Allowance and other allowances are linked to basic pay only and therefore remain stagnant at 2007 levels, making it inadequate to meet the basic cost of living a middle class urban life. Minimum that can be done to ameliorate the ordeal of officers immediately is merging 50 per cent of DA with basic pay immediately as has been the legacy, wef Jan 2012.

Unions should keep up the pressure for maximum MGB and keep the pension issue separate from NJCS. Pension may be discussed later as it will applicable to Executives also. At least 2 special increments should be added after fixation of new basic pay to reduce the gap between executives and workers since workload is getting increased day by day because of reduction in the number of workforce. Unions should be aware of their responsibilities and do not compromise the interest of the workers to please the Management.

Dear All My SAIL Colleagues,
Repeatedly I am telling the recognized Trade Unions in SAIL are not reflecting the minds voice of the employees.But they are go with the management.So we raise our voice to the union leaders instead of management.This is totally unfortunate for the employees of SAIL.This because of there is no periodical election for recognition will not conduct in SAIL.But big organisation like Railways will conduct elections.Example in Recent Southern Railway Recognition Elections the Big Trade Unions(INTUC,CITU)are lost their recognition.But Only one Union (S.R.M.U Southern Railway Mazdoor Union)will win.Unless our unions are rethink their attitude and action in future in SAIL otherwise employees are not benefitted.